[Q1 2026 Crypto Startups Raise Nearly $5 Billion, Prediction Markets Emerge as Biggest Winners] Deep Tide TechFlow reports on April 4th, citing DefiLlama data via DL News, that crypto startups raised nearly $5 billion in Q1 2026, a year-over-year decline of 16%. However, the investment ecosystem continues to evolve, with funding flows shifting noticeably from speculative tokens to practical sectors such as payments and trading infrastructure. Among these, the prediction market sector led the way with over $1.7 billion, followed by payments and trading infrastructure, which attracted $735 million and $423 million, respectively. Top-tier non-crypto institutions such as Sequoia Capital, Founders Fund, Bain Capital, and Alibaba have also accelerated their entry into the space. The top 10 funding projects in Q1 are as follows: - **Kalshi**: $1 billion, valuation of $22 billion, led by Coatue Management, a CFTC-regulated prediction market leader - **Polymarket**: $600 million, funded by Intercontinental Exchange (ICE), a leading decentralized prediction market platform - **Rain**: $250 million Series C, valuation close to $2 billion, led by Iconiq Capital, stablecoin payment infrastructure - **BitGo**: $213 million, NYSE IPO, valuation exceeding $2 billion, crypto custody institution - **Flying Tulip**: $206 million, public token sale, led by DeFi architect Andre Cronje, integrating trading/lending/insurance - **Whop**: $200 million, fully funded by Tether, valuation of $1.6 billion, stablecoin payment platform for digital creators - **LMAX Group**: $150 million, fully funded by Ripple, integrating RLUSD stablecoin as collateral for margin trading - **Alpaca**: $150 million Series D, valuation exceeding $1 billion, led by Drive Capital with participation from Citadel Securities - **Bluesky**: $100 million Series B, led by Bain Capital Crypto, decentralized social platform with over 43 million users - **Anchorage Digital**: $100 million, funded by Tether, valuation exceeding $4 billion, the first federally chartered crypto trust institution in the U.S.